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The controversial Ethereum Improvement Proposal (EIP) 1559 would have burnt 970,000 Ether (ETH) — with a total value of $360 million — in the last year, if it had been implemented. EIP-1559 seeks to reduce transaction fees by introducing flat fees alongside a burn mechanism,

The findings, based on Dune Analytics data and published by the Head of DTC Capital Spencer Noon, have raised questions among some in the wider Ethereum community as to why the proposal has not been implemented already. Twitter user ‘Laur Science’ suggested it should be implemented in the next hard fork, adding:

“Hopefully, we don’t keep discussing this for two more years while miners get too much $ETH and dump it for $USD, keeping the $ETH price in check.”

Cumulative ETH burnt with EIP-1559. Source: Dune Analytics

Although the idea of burning fees has long been considered, even prior to Ethereum’s genesis block in 2015, EIP-1559 was the first serious proposal to suggest integrating the concept into Ethereum’s code.

The current proposal, first suggested way back in 2018 by Vitalik Buterin, would drastically change how transaction fees are calculated. EIP-1559 proposes that all transactions have a standard flat fee called a ‘basefee’. This fee is burnt and the incentive for miners comes from users adding a ‘tip’ on top of the base fee.

The proposal allows the basefee to be varied to help keep block size around 10m gas. Ultimately, the proposal has four design goals — predictable fees, consistent blocksize, increased security, and preventing economic abstraction (fees being paid in other tokens).

As EIP-1559 will significantly impact how miners earn revenue it has triggered push-back from the mining community who have recently been enjoying record revenues. A week ago Messari stated that Ethereum fees have surpassed Bitcoin fees for a record breaking two months.

That same day ConsenSys developer Tim Beiko published the results of a survey of 25 teams building on Ethereum about the proposal. Of those surveyed, 60% responded in favour, however, eight of the nine mining firms queried asserted they would reject the proposal if implemented as a hard fork.

Earlier this year, Metamask lead developer Dan Finlay, expressed concern behind placing the responsibility on miners to fix the ‘basefee’ parameters. Ultimately, Finlay suggested the net effect of the proposal would be to make, “the tip a sort of single-price auction within each block that reproduces all the problems of the current market but with the additional complexity of this one”.

Ethereum Name Service developer Nick Johnson, stated his apprehension of the proposal due “the lack of any formal analysis that shows 1559 behaves as intended.”

In July, responding to ever increasing gas fees, Vitalik Buterin once again called on EIP-1559 as the ultimate solution.

Within one month of Buterin’s Tweet, total transaction fees for Ethereum passed that of Bitcoin (BTC) before taking a steep ascent to all-time highs. 

This is not the first time, EIPs have divided the Ethereum community due to malaligned goals. Last month, EIP-2878, which would reduce block rewards by 75%, was also criticised heavily by the mining community.

Cointelegraph , 2020-10-16 06:00:35 ,

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

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